Despite the deal to extend the US debt limit, the price of gold hit record highs late yesterday. We think this makes sense. Although the deal may cut investors’ aversion to risk, it signals the onset of fiscal tightening which will put even more onus on the Fed to keep monetary policy very loose. For this and other reasons, we think gold remains on course to rise from around $1,665 per ounce to our long-held view of $2,000 in 2012 and then further still in 2013.